Polyus, Russia’s largest gold mining company, is accelerating the development of Sukhoi Log, one of the largest untapped gold reserves in the world. Located in Irkutsk Oblast, Siberia, Sukhoi Log has estimated reserves of 64 million ounces of gold, although its ore grade is relatively low. Last month, Polyus announced it had extracted its first gold from the Sukhoi Log ore and outlined plans to ramp up mining operations over the next two years.
Major preparatory works completed
Polyus’ CEO, Alexey Vostokov, reported that significant preparatory work has been completed at the Sukhoi Log site, including adding another 3.5 million ounces of gold reserves to the company’s balance sheet. However, he emphasized that the main construction and development tasks are still ahead. The company is focused on building critical infrastructure, including roads, power supplies and a processing plant, with the aim to begin plant construction in 2025.
The first stage of the project, expected to reach full capacity by 2028, will involve processing up to 10 million tonnes of ore per year. The total processing capacity for the entire development is projected to reach 30 million tonnes of ore annually, making Sukhoi Log a major contributor to Polyus’ output in the coming decades.
Key mining projects in Irkutsk region
Polyus is currently developing several gold mining projects across Russia, including in the Krasnoyarsk Territory, Irkutsk, Magadan and Yakutia regions. Among these, the company’s flagship projects are Sukhoi Log, Chulbatkan, and Chertovo Koryto, all located in the Irkutsk region.
- Chulbatkan has an estimated ore capacity of 5 million tonnes, with an expected output of around 3 million ounces of gold per year once the project reaches design capacity.
- The development of these fields is expected to create over 1,500 new jobs in the region.
Sukhoi Log: A historic deposit
The Sukhoi Log gold deposit was discovered in the USSR in 1961, with the first exploration work starting a decade later in 1971. Located in the Bodaibo district of Irkutsk, Sukhoi Log is widely regarded as one of the largest undeveloped gold deposits globally. According to 2020 estimates, the deposit contains 40 million ounces of gold reserves, with an average grade of 2.3 g/t, and 67 million ounces in total resources, with an ore grade of 1.9 g/t.
Polyus has been working on unlocking the full potential of this massive deposit, which could significantly impact Russia’s gold production in the years ahead.
Challenges and outlook for Russia’s gold industry
Russia’s gold industry is facing a period of transition. A report by the Russian Central Scientific Research Geological Prospecting Institute (TsNIGRI) suggests that gold production in Russia could peak by 2030, after which production is expected to begin declining. This is attributed to the depletion of easily accessible resources and a slowdown in the development of new gold deposits.
In 2021, Russia’s total gold production decreased by 0.2% year-on-year, amounting to 330.9 tons, while the total production—including secondary raw materials—was 363.5 tons (a slight decline of 0.1%). These figures indicate a stagnation in gold output, largely due to a lack of new discoveries and a decline in high-grade deposits.
The expected decline in production is compounded by weak growth in reserves and the deteriorating structure of existing gold deposits. TsNIGRI’s experts warn that new exploration projects are essential to sustain production, especially in the Siberian and Far Eastern regions of Russia.
Government plans for gold resource development
To address these challenges, the Russian government has launched initiatives like the “Reproduction and Use of Natural Resources” program and the federal project “Geology: Revival of a Legend”, which are designed to accelerate geological surveys and exploration in Russia’s gold-rich regions. This includes significant investments in gold reserves in Siberia and the Russian Far East.
By bolstering its geological exploration activities, the Russian government aims to replenish the country’s gold resource base and ensure the long-term sustainability of its gold mining sector.
Conclusion
Polyus’ push to accelerate the development of Sukhoi Log marks a critical milestone for Russia’s gold industry, with the potential to contribute substantially to the country’s gold production over the coming decades. While the project faces challenges, including the low grade of the ore and the overall decline in Russia’s gold reserves, the massive scale of Sukhoi Log’s deposits positions it as a key player in securing the future of Russian gold mining.
As global demand for gold continues to rise, the industry’s success will depend on both state-backed exploration initiatives and private sector efforts, such as those led by Polyus, to unlock the full potential of Russia’s untapped resources.
